In this report
Overview

Does Fidelity's green path lead to personalized financial advice?

Last reviewed: February 2010
TV showing Fidelity green path commercial
Turn Here clients are advised to stay on their not-so-specialized investment path.

Commercials for Fidelity's Turn Here program feature investment advisers telling clients that whatever their goals are, the company will help them find their way there. As a husband and wife leave a Fidelity office, a green path rolls out before them. It symbolizes Turn Here's financial guidance, which they are told to follow. Another client starts to step off the green path into a showroom for classic sports cars, but an adviser appears and admonishes him to "Stay on the line!"

Turn Here provides financial advice for people in different age groups. The program also offers tips on managing money. Sounds great, but is Fidelity really offering personalized information, as the ads suggest? Or is Turn Here just a marketing tool to send you down a path toward its investment products?

The real deal

Fidelity admits that some of the information Turn Here presents is drawn from its existing online content, but it says it has made the information more user-friendly. We found little to differentiate it from recommendations made by companies like Schwab, T. Rowe Price, and Vanguard.

And Turn Here's advice does coax you toward Fidelity products. For example, a tutorial on "Ways to save more" has links to Fidelity credit cards and annuities. Click on college savings advice, and you'll find a link to Fidelity-managed 529 plans.

You can purchase financial products from other companies through Fidelity, but you may be charged a hefty fee to do so. While transaction fees may be waived for purchasing investments from some companies, others—like Vanguard or T. Rowe Price—may cost you $75.

Fidelity products might not always earn you the most money. For example, some of its mutual fund returns lag behind those of comparable funds at Vanguard, one of its largest competitors.

If you'd like to buy target-date funds, which shift exposure from stocks to safer investments as you get closer to retirement, there may also be better choices than Fidelity's offerings. In Morningstar's September 2009 ratings of target-date funds, Vanguard came in first. American Century, American Funds, and T. Rowe Price also received high scores. TIAA-CREF, Wells Fargo, and two others received "above average" scores. Fidelity (along with Schwab) was rated just "average."

The bottom line

Many mutual fund companies link their financial advice with proprietary products. And if you don't have time to shop around for the best deal for each of your investments, Fidelity is one of the few companies that offers a wide range of inexpensive investments with decent performance.

Or you could turn to a fee-only financial planner, who could set up a personalized portfolio of investments for you. Planners charge a flat fee for their advice or charge based on a percentage of assets under management; they don't accept commissions on the products they sell. You can get referrals from the National Association of Personal Financial Advisors, at www.napfa.org.

This article appeared in Consumer Reports Money Adviser.

Posted: July 2010 — Consumer Reports Money Adviser issue: February 2010